The Opportunity

The Real Estate Market in Thailand

Over the past decade, Thailand's real estate market has experienced significant growth, particularly in urban areas like Bangkok. This urban expansion led to increase in land prices, averaging an 8% annual rise, while consumer incomes grew by only 3% annually, resulting in many residents opting for smaller condominium units.

The COVID-19 pandemic in 2020 led to a sharp decline in property sales. The market began to recover in 2022, with sales volume increasing from 60,000 units in 2021 to 107,000 units in 2022, driven by the introduction of new products.

In 2023, the market faced challenges due to a nationwide economic slowdown, the cancellation of temporary easing measures, and increased mortgage interest rates. This led to a 6.6% year-on-year decrease in registered transfers of residential property rights. However, foreign demand for condominiums remained robust, with a 25% year-on-year increase in units transferred to foreign buyers.

Recently the Thai government has implemented stimulus measures to invigorate the real estate market, including reduced transaction fees for properties valued up to 7 million Thai baht and tax incentives for property developers. These efforts aim to stimulate market activity and promote economic growth.

Samui's Real Estate Market

Koh Samui's real estate market has experienced notable growth over the past decade, thanks to the development of tourism. Foreigners have been able to access the market in two ways. Firstly, by buying property directly, and secondly, through leasehold agreements. The island has established itself as a premier destination for luxury property investments.

This consistent growth was driven by increasing tourism, foreign investment, and infrastructure development.

Here's an overview of the key trends:

1. Property Value Appreciation

• Annual Increase: Property prices have appreciated by approximately 8–10% annually over the past five years.
• Luxury Segment: High-end properties, especially luxury villas in prime locations, have seen even sharper increases in value.

2. Rental Market Dynamics

• Rental Yields: Investors can expect rental yields of around 6–8% for short-term rental properties, which is higher than many other tourist destinations in Thailand.
• Occupancy Rates: Luxury villas maintain average occupancy rates of 75–85% throughout the year, indicating strong demand.

3. Tourism and Infrastructure Impact

• Tourism Growth: Koh Samui attracts over 2 million tourists annually, contributing to the high demand for vacation rentals and real estate investments.
• Infrastructure Development: The island's international airport reports a 15% increase in annual passenger traffic, with new direct routes from key cities in Asia and Europe.

4. Market Composition

• Buyer Demographics: Approximately 60% of buyers in Koh Samui are foreign investors, primarily from Europe, Australia, and Russia.
• Property Types: Villas make up about 70% of the real estate market, while condos and apartments account for the remaining 30%.

In summary, Koh Samui's real estate market has experienced robust growth over the past decade, with property values appreciating steadily, strong rental yields, and increasing demand driven by tourism and foreign investment. The island's ongoing infrastructure development further enhances its appeal as a prime destination for real estate investment.

When considering the cost, according to the Bank of Thailand, the median sales price for a villa was about ฿16,900,000 (close to €500,000), with a price per square meter of ฿80,800 (approx. €2.400).

The island's strict environmental regulations, which limit construction to three floors and a maximum height of 12 meters, have helped preserve its natural charm and exclusivity, further enhancing property values.

Owning Property in Thailand 

The real estate market in Thailand is very specific. Traditionally, land is offered under a lease agreement, meaning that the buyer leases the land for a period that is typically for 10 years but can go up to 30 years and can build a house and use it. At the end of the period, either the lease is extended, or the house becomes the property of the landowner.

Foreigners have been prohibited from owning land in Thailand since the enactment of the Land Code Act in 1954. To own land in Thailand you need to be named on the Chanote of the land. Chanote title deeds are the most secure form of land ownership in Thailand. Law restricts foreign ownership of land. While foreigners cannot own land outright, they can hold certain rights, such as leases, usufructs, and mortgages, which can be registered in their name on the title deed. Thai individuals can freely buy and sell Chanote title deeds among themselves, but foreigners are forbidden from owning such land titles.

This has evolved over the last decade, as the market has opened to foreigners primarily through condominiums — flats in large buildings, typically with shared pools and green areas. For any project, up to 50% of the condominium can be owned by foreigners.

There are other ways to structure the property acquisition through a local company. In case of interest, contact us.

Why investing in Thai Real Estate Market

Real estate remains a compelling investment, especially during periods of inflation — and even more so in dynamic markets characterized by high demand and limited supply. Below, we outline some of the reasons why the Thai real estate market, and Koh Samui in particular, presents a uniquely attractive opportunity for investors. The graph below summarizes the elements detailed below. 

TIMING

Timing is one of the most challenging aspects of any investment, whether in real estate or financial markets. As of mid-2025, Koh Samui remains in a post-COVID recovery phase. Tourism has rebounded significantly and is nearing pre-pandemic levels, but it hasn't fully recovered yet. Moreover, ongoing geopolitical uncertainty and inflationary pressure continue to affect global travel patterns, likely keeping tourist numbers slightly below 2025 targets for Asia and Thailand in particular.

While we may no longer be at the absolute bottom of the market — which occurred just after COVID — we are clearly still below the peak, leaving meaningful room for future growth. As tourism continues its steady recovery, it will provide ongoing support to the local real estate sector.

Additionally, although the post-COVID environment led to rising interest rates and a general slowdown in global real estate markets, the recent stabilization of rates is creating a more supportive environment for new investment.

THE LACK OF SUPPLY

One of the most critical aspects of Koh Samui's real estate market is the inherently limited supply. Prime real estate is a safe bet in any market — but on an island of 70,000 residents hosting over 2 million tourists annually, the imbalance between demand and available land is particularly pronounced.

The geographical constraints of an island mean that property availability is limited by nature. Our focus on premium areas — those closest to top beaches, schools, and services — tightens this supply even further.

Additionally, foreign ownership laws in Thailand have historically restricted access to land ownership. With new, more flexible structures and legal solutions now available, a growing number of foreign investors are entering the market, increasing both demand and pressure on existing inventory.

The market itself is fragmented. On one end are condominiums — typically priced between €100,000 and €200,000 — but these often lack uniqueness or charm. On the other end are luxury villas, priced from €500,000 to over €1 million. Mid-market renovated homes — in the €200,000 to €400,000 range — are rare, and that's precisely where we position ourselves: creating new supply by renovating undervalued properties.

ACCESS TO PREMIUM AREAS

In real estate, location is everything — and in Koh Samui, premium areas appreciate faster and attract stronger rental demand.

Why? Because tourists and residents alike want proximity to the best beaches, restaurants, bars, and schools. Areas like Chaweng, parts of Ban Rak, and Lamai are considered top-tier, offering both natural beauty and convenience. Chaweng, for example, is the most sought-after district for both tourists and long-term renters, with properties located within 15 minutes of Chaweng Beach offering particularly high potential.

We also focus on properties near international schools, which appeal to expats and long-term residents. Interestingly, some parts of Ban Rak are closer to Chaweng Beach than certain addresses within Chaweng itself — an insight that gives us a strategic advantage.

Another factor that influences value in Thailand: proximity to a 7-Eleven. It may sound amusing, but in Thailand, a nearby 7-Eleven is seen as a real advantage — a major plus for both tenants and buyers. 

THE INFRASTRUCTURE

Samui's infrastructure is under pressure due to rising population and tourism. The island is built around a single main road — Ring Road (Route 4169) — which connects key beaches and towns. While generally well-maintained, this infrastructure has its limits: more people means more traffic, and longer travel times.

This reality further boosts the value of centrally located properties, which offer quicker access to the island's key destinations and services. In a growing island economy, convenience and accessibility become increasingly valuable.

RENOVATION AS A VALUE CREATING STRATEGY 

Globally, renovation has become more complex. Rising costs, inflation, and a shortage of skilled labor have made construction projects more difficult — and Thailand is no exception. On a tropical island like Samui, where much of the workforce is tied to tourism, the challenge is even greater.

That said, this challenge is precisely where our opportunity lies. The owner behind AAA-Home began renovating properties in 2004 in Belgium, and have over 20 years of experience developing and upgrading apartments and buildings. In Thailand, we've already completed two full renovations, are finalizing a third, and have one more in the pipeline.

Our local partnerships give us access to reliable, competent professionals, and we manage communication carefully — an essential factor in a country where only around 44% of the population speaks some English.

We are not simply buying houses and renting them for a return. Our edge is in adding value through renovation. Many properties in Samui need improvement, and few investors have the knowledge or resources to take on such projects. This gives us access to undervalued opportunities that others overlook — and the renovation premium is real.

GLOBAL DEMAND TO INVEST IN SAMUI

In 2024 Koh Samui draws close to 3 million visitors from all around the world. As a global tourism hub, the island benefits from sustained international interest — not only in vacationing, but increasingly from foreigners moving to Samui for the long term.

Most real estate investors tend to operate within their home market — a Spaniard buys in Madrid, a French investor targets Paris. But Koh Samui breaks that logic. Once someone visits, they often return. And over time, the desire to own a home or villa on the island becomes real.

Samui appeals not by nationality, but by experience. It offers a lifestyle that resonates with investors globally: tropical beauty, personal use potential, and attractive rental income.µ

For those with a strong real estate portfolio, taking an exposure to Samui real estate market is not just a financial investment — it's a personal aspiration. That growing emotional and lifestyle-driven demand will continue to fuel long-term price appreciation.

A DYNAMIC AND RESILIENT MARKET

Samui's post-COVID recovery showcases the resilience and dynamism of its real estate market. We visited in December 2021, when Chaweng Beach Road — typically the busiest area on the island — was nearly deserted. Shops, restaurants, and even 7-Elevens were closed.

Yet just weeks later, the energy began to return. By mid-2022, activity was nearly back to normal, and today, the island is thriving again. The speed of this rebound reflects both the underlying demand for Samui as a destination, and the adaptability of its economy.

This is not a stagnant or saturated market. Samui is alive, evolving, and growing — and that energy translates directly into opportunities for smart, well-timed investment.

CURRENCY DIVERSIFICATION FOR EURO-BASED INVESTORS

For European investors, buying real estate in Thai Baht offers a form of currency diversification, which can hedge against long-term euro depreciation. In the context of inflation and geopolitical risk in Europe, holding hard assets abroad becomes an attractive alternative.

DIGITAL NOMADS AND REMOTE WORK TREND

The rise of remote work and digital nomadism has redefined global real estate demand. Samui — with its beauty, lifestyle, low cost of living, and growing internet infrastructure — is increasingly attractive to remote workers. Properties catering to this demographic (comfortable villas, mid-term rentals, proximity to co-working hubs) are now in higher demand.

GROWING DOMESTIC THAI MIDDLE CLASS

It's not just foreign demand. Thailand's growing middle and upper-middle class is increasingly looking at second homes and lifestyle properties, especially in places like Samui. This trend adds an internal engine of demand that supports long-term value.

Properties meeting European standards are more and more in demand, not only for foreigners investors but also for upper-middle class Thai nationals.

THAILAND'S POLITICAL STABILITY

Compared to many Southeast Asian countries, Thailand remains relatively politically and economically stable, with established institutions and consistent policy frameworks. For investors looking at the broader region, this gives Thailand — and Samui by extension — a perceived safety premium.

DISCLAIMER: The information provided is for general informational purposes only and does not constitute investment advice. Investing carries inherent risks, including the potential loss of capital. You should always conduct your own due diligence and consult with a qualified financial advisor before making any investment decisions. We also encourage you to consult third-party sources for more detailed information on any specific topics discussed.